The pound spiked to US$1.2487 following the ruling from the Supreme Court which found Boris Johnson’s proroguing of Parliament to be unlawful. Sterling bounced higher following the judgement, as pound traders once again reassess the probability of a no deal Brexit being avoided. With ministers heading back to Parliament imminently still 5 five weeks ahead of 31st October, there is time to prevent a damaging disorderly Brexit.
However, the pound has pared some gains quite simply because the level of political uncertainty in the UK remains extremely elevated. This ruling also dramatically weakens Boris Johnson’s negotiating position with the EU. The PM is suddenly in a much weaker position. And let’s not forget that the BoE only recently indicated that a interest rate cut could be on the cards in the case of prolonged Brexit uncertainty.
GBP/USD levels to watch:
Given the conflicting sentiments pound bull struggling to stay in control. The pound is trading back around the flat line. $1.2430 is offering immediate support. A breakthrough here could see the slide accelerate towards $1.2400 and $1.2380. On the upside a move beyond $1.25 could see resistance met at $1.2530 prior to $1.2580.
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